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Technology Stocks : Dell Technologies Inc.

DELL 126.42

+2.8%

Dec 19 9:30 AM EST

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To: Geoff Nunn who wrote (48747)	6/23/1998 1:38:00 PM
From: Chuzzlewit	Read Replies (1) of 176387

Good morning Geoff, What splits seem to do is to encourage a greater fool game. I am still scratching my head in wonder about this issue. It used to be (in the distant past) that a split was taken as a bullish sign for the company -- a kind of reaffirmation on the part of management that all was well. In the last decade or so we've had the spectacle of momentum players jumping in and pushing the stock skyward. But it's really a game of musical chairs. The last momentum players left in the game are holding the bag as the stock retreats. I suppose there is always the adrenalin rush as the stock gaps up for a few days, but after the manic phase there is the depressive stage as the stock plops back down. I recently studied market pricing to see whether there was anything to the notion that splits add permanent shareholder value. If they did you would expect that there would be an inverse correlation between the share price and the P/E. That is, lower priced shares should have a higher P/E. My study indicates that they don't. TTFN, CTC

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